How can employers get waivers of claims from terminated employees?

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in Employee Benefits Program,Firing,Human Resources

Q. May an employer fire an employee and then ask the employee to sign a waiver of claims or severance agreement?

A. Yes. For a waiver of claims to be enforceable, the employer needs to provide “consideration”—something to which the employee would not otherwise be entitled. Typically, the consideration is severance pay, continued benefits payments or both. If the employer has a policy of paying severance without getting a waiver of claims, it would have to pay the employee extra severance or give something else of value in order to get a waiver of claims. Of course, if the employee wishes to forgo the consideration, he or she is not obligated to sign a severance agreement.

Final note: Special rules apply for older employees—consult your attorney.

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